Summary: Evolving technology; knowledge beyond accounting; demand in accountants.
It’s about time we talk about the future of accounting even if this conversation might not have been long awaited. No one’s tip-toeing around the topic because no one really thinks about it. It’s the kind of thing that really only loiters in the minds of accountants (and understandably). But knowing what to expect from the accounting industry over the next several years is relevant for everyone. Here’s why.
We’ve all seen massive changes in the accounting world over the last year or so — accountant or not. And without going into the details, we all know such changes have impacted and will continue to impact the worlds of people on small and large scales — accountant or not.
Let’s take a look at imminent changes and consider how they’ll affect all of us.
AI = Friend: Evolving technology and its nonnegotiable implementation in the accounting world
Like every other industry today, the accounting industry is rapidly evolving with the rise of technology. While the future of accounting is not just about technology, it sure is being driven by it.
Intelligent technology might seem new to some, but most people are aware of how technology has infiltrated many companies. Some firms have already begun using basic automated accounting processes to complete certain accounting tasks.
Forbes notes that technology such as automation, minibots, machine learning, and adaptive intelligence are becoming part of the finance team. Some processes that AI can do or streamline include supplier onboarding, accounts payable, audits, procurement, purchasing, expense management, close processing, and customer queries, to name a few.
While us guys over at Prospect Financial Solutions haven’t implemented most of those technologies, we recognize this seemingly inevitable shift from humans to AI. And the biggest technological development that we’ve seen as accountants in the last decade has been the emergence of the cloud.
Thanks to the cloud, we have seen the rise of artificial intelligence, machine learning, robotic process automation, and various other accounting technologies that have allowed us to automate far more.
Here are some examples of how automation is helping accountants this very second:
- Machine learning and robotic process automation can help accountants prepare the books in a fraction of the time that it used to
- The interconnection of third-party software vendors and accounting systems allows data to flow seamlessly between each other, reducing manual data entry and errors
- Artificial intelligence is able to quickly augment an accountant’s skills
With this in mind, studies have concluded that accountants have a risk of 98 percent when it comes to having their job automated. However, there’s more to this than job reduction. There are ways that accountants will still be needed, and we’ll address this in the next point.
“Yeah, but do you have other skills?”: Knowledge beyond accounting will prove necessary for success
Lo and behold, the future of accounting is not just about technology (even though it sure is being driven by it). Or, maybe it is because the major changes we’re seeing are a direct or indirect result of technology. But, we digress.
As a result of the previous change, technical accounting and tax knowledge will become less and less important compared to one or two decades ago. I guess this helps to explain the recent 30 percent drop in accounting grads being hired by public accounting firms according to a recent AICPA report.
Many accounting firms are restructuring to remove administrative jobs and are now using AI for accounts payable and receivable. Yikes. And with basic accounting being outsourced to microchips, how much work is left for humans? What does this mean for accountants? Will individuals seeking accounting services be forced to communicate with an automated machine? (We’ve all had one or a few experiences that makes talking to a machine anything but than pleasant.)
The short answer: Opportunities still exist for accountants, just in a way different. Many firms are opting to hire candidates with other skills instead of those with technical knowledge.
According to advisor and former Big 4 accountant Satyaketu, he believes the next generation must understand how the entire business works, not just the accounting department.
This means that tomorrow’s accountants will be required to have plenty of advising and consulting skills. They’ll be called upon to help clients forecast and evaluate financial decisions in ways a computer cannot. And as technology will automate more of the basic numbers tasks, accountants will also need to get better at dealing with actual, corporeal, people in the flesh!
OK, so maybe dealing with people as an accountant isn’t that bad. But dealing with numbers and finances in itself is a bit much, so we get it.
Well, who’s ready for soft skills? These are the non-technical skills that relate to how you work and how you interact with people. And they are absolutely critical to the future of accounting if technology continues to advance… which it will.
We often hear about the rise of the “trusted advisor” in today’s world. The fact is that a “trusted advisor” is not a number cruncher but someone who possesses a whole host of soft skills to interact properly with people and manage their work.
While there are tons of important soft skills, firms should prioritize hiring and training for the following two as of now:
- Problem Solving
A key ingredient of being able to problem-solve is to be adaptable. As the world moves quickly, high performers need to roll with the punches and use creativity to solve problems when it comes to their work and working with people. And problem-solving and innovation also go hand in hand.
- Communication
There are several reasons why accounting firms would need to test someone for effective communication skills when hiring on to the team.
- Good communication is the cornerstone of good customer service. In order to be customer-facing, this new age of accountants will need to possess excellent communication and customer service skills. The reality is that technical experience is easy to train on; customer service — not so much.
- Technology will do (and already is doing) the heavy lifting. So there needs to be someone who properly communicates to clients and team members about what the technology has done. We can’t expect clients to also keep up with technological advancements when it doesn’t directly apply to them. They won’t learn the jargon or the processes, so a good communicator is essential in order to guide them through complex situations.
“All hail the accountant”: The accounting industry will see a rise in popularity, gradual or unexpected
And just like that, becoming an accountant will have its rise in popularity, too. We can say it’s sort of like the Influencer craze we’re seeing these days — but for a different reason.
It isn’t because people love accounting so much. A lot of people actually don’t really want to talk about finances, not even business owners (that’s why guys like us exist… to handle the unappealing, laborious financial work that no one else really wants to understand).
Still, the accounting industry will experience a surge — gradual or unexpected. And, of course, one of the primary causes for this demand in accountants is the increase in machine learning and automation.
The US Bureau of Labor Statistics predicts a 10 percent growth in the demand for accountants and a 19 percent growth in the demand for financial managers until 2026. That’s better than the average US profession. So, robots and AI’s aside, the accountant’s services should remain a key business function for at least the next decade.
The reality is that accounting professionals will never be replaced by technology despite many accounting tasks being automated.
According to the industry publication on Accounting Today: “technology simply cannot — and will never be able to — solve on its own” the client problems addressed by accountants. In fact, accountants in the future will have the opportunity to develop more advanced skills so that they can increasingly serve as business consultants and strategic partners as opposed to simply financial experts.
It’s crucial for accountants to prepare for the future of accounting by developing the necessary skills to perform the administrative, managerial, and analytical tasks that technology can’t do. Thus, the accountant of the future will without a doubt need to be technologically savvy to evolve with the changing industry.
Let’s consider some technology-specific skills that would be wise for progressive accountants to develop in order to be successful (or at least ahead of the game… success has multiple facets that can’t only be determined by soft skills).
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The cloud
We’ve touched on this throughout this article, but accountants need to become proficient in leveraging the cloud to offer clients up-to-date financial analysis and to stay competitive.
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Blockchain
Accounting professionals who wish to use blockchain will need to be familiar with relevant software programs, as well as how to set up information transfer for ledgers, contracts, and records.
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Data analyzing
Many accountants may take on an advisory role with clients, which means they’ll need to be skilled at analyzing big data to spot patterns and trends. Familiarity with data mining and other data science techniques will be key here. They’ll also need to understand how to use data visualization strategies and programs to translate all that data into insights for clients and company leaders.
Accounting professionals with these skills can use predictive analytics and forecasting to strategically advise clients or organizations. As automation frees up time previously spent on more mundane tasks, accounting professionals can focus on these higher-level analytical skills.
Be sure to check out the related articles below for additional professional perspectives on how accounting will change in the future:
The Future of Accounting: The 2021 Annual Guide
The Future of Accounting: Demand and Evolving Technology
Accounting in 2040: 4 Ways the Industry Will (Probably) Change in 20 Years
